In the wake of the COVID-19 pandemic, many countries around the world have resorted to printing money as a way to stimulate their economies. With interest rates already at rock-bottom levels, central banks have turned to quantitative easing policies to inject liquidity into the system. However, not all countries have embraced money printing to the same degree. Some nations have pumped enormous amounts of newly created money into their economies, while others have been more cautious. This raises an important question – which countries are printing the most money in response to the pandemic economic crisis?
What is Money Printing?
Money printing refers to a monetary policy tool known as quantitative easing (QE). Under QE, a country’s central bank creates new money digitally to purchase bonds or other financial assets. This boosts the money supply in the economy and provides liquidity to the financial system. The goal is to lower interest rates, stimulate economic growth, and stave off deflation.
QE emerged as a key policy response following the 2008 global financial crisis. Central banks around the world cut interest rates to near zero levels, but still needed to provide further stimulus. QE allowed them to inject money directly into the economy once conventional rate cuts were no longer possible. Now over a decade later, the COVID-19 crisis has led many major central banks to revive and expand their QE programs.
While QE can help stabilize economies during periods of crisis, it is controversial. Critics argue it could lead to currency devaluation and eventually higher inflation. Supporters say it is necessary to prevent deeper economic damage. But there is no doubt that QE represents a form of money creation that can dramatically expand a nation’s monetary base.
Ranking Money Printing By Country
The scale of QE varies significantly across countries. According to statistics from central banks and the Bank for International Settlements (BIS), below are the top 10 countries that have printed the most money during the pandemic in dollar terms:
United States
The US has printed over $7 trillion in new money since the pandemic began. This includes asset purchases by the Federal Reserve as well as government stimulus programs. The Fed’s balance sheet has more than doubled from $4.2 trillion in February 2020 to over $8.9 trillion as of November 2022. This enormous expansion of the US monetary base tops the list globally.
Japan
Japan places second with close to $4 trillion printed. The Bank of Japan has been pursuing aggressive QE for many years, well before the pandemic. But it raised its asset purchase target to ¥80 trillion per year in response to COVID-19. Japan’s central bank now holds assets valued at over 140% of the country’s GDP.
Eurozone
The European Central Bank has printed over €3 trillion in new euros during the pandemic. This includes asset purchases under the €1.85 trillion Pandemic Emergency Purchase Programme. The ECB’s balance sheet now stands at around €9 trillion total assets under management.
United Kingdom
The Bank of England has created over £700 billion in new pounds. The UK central bank restarted QE in March 2020 to help mitigate the economic impacts of COVID-19, adding to its existing £435 billion in asset purchases from the 2008 crisis.
China
China has printed the most money in absolute terms after the US and Japan. The People’s Bank of China does not publish detailed data about its asset purchases and money creation. But estimates suggest it has injected around $3 trillion into the Chinese economy.
Canada
Canada’s quantitative easing measures total over CA$400 billion. This includes CA$300 billion of newly printed money used to buy government bonds during the pandemic. The Bank of Canada’s balance sheet now exceeds CA$600 billion total assets.
Australia
The Reserve Bank of Australia has created over A$350 billion in new Australian dollars. Since March 2020, its asset purchases have doubled the RBA’s balance sheet to approximately A$650 billion. This quantitative easing aims to boost economic growth and achieve full employment.
Switzerland
The Swiss National Bank conducted massive interventions in currency markets and expanded its QE program. It has printed around CHF 200 billion in new Swiss francs during the pandemic. The SNB now holds foreign currency assets exceeding CHF 1 trillion.
Sweden
Sweden’s Riksbank has expanded the money supply by over kr700 billion. This includes increasing holdings of bonds and other assets to stabilize financial markets. The Riksbank now holds assets that amount to roughly 40% of Sweden’s GDP.
South Korea
The Bank of Korea has initiated various new credit facilities and asset purchase programs during the pandemic valued at over ₩125 trillion. This quantitative easing aims to ensure market liquidity and facilitate bank lending.
| Country | Amount Printed (USD equivalent) |
|---|---|
| United States | $7 trillion |
| Japan | $4 trillion |
| Eurozone | $3 trillion |
| United Kingdom | $1 trillion |
| China | $3 trillion (estimated) |
| Canada | $400 billion |
| Australia | $350 billion |
| Switzerland | $200 billion |
| Sweden | $100 billion |
| South Korea | $125 billion |
Factors Driving Money Printing
A few key factors help explain why certain countries have relied on massive money printing more than others during the pandemic:
Size of the economy
Larger economies like the US, China, and Japan have created trillions in new money because the sheer scale of their financial systems requires huge sums to have an impact. Smaller nations do not need to print nearly as much.
Role of the US dollar
The prominence of the US dollar in global trade and finance means other countries hold significant dollar assets. As a result, when the US prints money, it gets distributed worldwide. This multiplies the effect.
Economic impact of the pandemic
Some countries have pumped out new money to mitigate larger economic contractions. The UK, for example, suffered a bigger GDP decline than Germany, and has implemented much more QE.
Pre-existing monetary policies
Nations that relied heavily on QE before COVID-19, like Japan and Switzerland, have doubled down on money printing during the crisis. Others, like Germany, came into the pandemic more reluctant on QE.
Tolerance for inflation
Countries more worried about deflation have unleashed larger amounts of money printing. For example, Europe and Japan entered the pandemic with lower inflation than the US, so they have printed more aggressively.
Money Printing and Inflation
A major side effect of money printing is higher inflation. More money chasing the same amount of goods leads to price increases over time. Here is how inflation has responded in major countries undertaking QE:
United States
The US has seen inflation climb from 1.4% before the pandemic to over 8% in 2022. Critics argue the Fed’s QE has fueled rising prices. But the Fed believes today’s inflation is more connected to supply chain issues and the labor market.
Eurozone
Europe’s inflation rate has jumped from 0.7% to over 10%. Trillions of euros in printed money is contributing to these price pressures, along with the energy crisis caused by Russia’s invasion of Ukraine.
United Kingdom
UK inflation has also soared to above 10%, leading the Bank of England to begin raising interest rates. The BoE admits QE has indirectly stimulated inflation by boosting demand.
Japan
Despite enormous QE for many years, Japan has maintained extremely low inflation near 2% or less. This illustrates how other economic factors beyond money printing also impact inflation.
However, over the long run, the magnitude of QE across the developed world seems very likely to generate higher inflation. Central banks will eventually need to reduce stimulus and raise rates, but unwinding QE is difficult without disrupting economies.
The Path Ahead
For now, the countries printing the most money seem intent on continuing QE until either inflation becomes unacceptably high or the economic recovery is more securely underway. But enormous money printing is not without risks. History shows it can be difficult to control once begun.
While necessary to combat a crisis like COVID-19, the trillions in newly created money also have major consequences. Markets and households around the world are now dealing with the inflationary fallout. It may take years before central banks can normalize policies and mop up all the excess liquidity injected into the system.
Nonetheless, quantitative easing and money printing have become essential tools for policymakers confronting crises. The pandemic has led virtually every major economy down this path. Time will tell, however, if they can turn off the taps before it is too late. For now, the countries running their printing presses hardest are those that will have the most difficult balancing act ahead.
